Online versus offline again on e-commerce FDI

Govt to continue consultations over FDI in e-commerce; the next meeting has been scheduled after a month

The government on Thursday initiated consultations with stakeholders of the retail sector to consider foreign direct investment (FDI) in e-commerce, but physical chains expressed their reservations.

The Retailers’ Association of India (RAI), which represents the Future Group and Reliance Industries, among others, initially rejected the invitation for the meeting. The business should be classified on category of goods and services provided and not on channels like brick and mortar stores or e-commerce, the association said.

However, representatives of the RAI attended the meeting with Commerce Minister Nirmala Sitharaman, along with members of business chambers Ficci and CII. Praveen Khandelwal of the Confederation of All India Traders was also present. Besides, e-commerce players like Flipkart, Snapdeal and eBay, international companies like H&M and Ikea participated as well.

“It was the first meeting…we are not taking any position this way or that way from the ministry. We have heard everybody. In fact, this is not going to be sufficient,” Sitharaman said after the meeting.

According to people present in the meeting, the government will continue consultations over FDI in e-commerce and the next meeting has been scheduled after a month.

At present, 100 per cent FDI is allowed only in business-to-business (B2B) e-commerce and not in the retail segment. Earlier, a statement by Kumar Rajagopalan, chief executive officer of the RAI, said, “There should be a level playing field in respect to FDI among different retail formats. It is our concern that although the outcome of e-commerce and retail in physical world is the same, the treatment meted out by the government to the two players in the same market is inequitable.’’